Think You're Good at Spotting Market Bubbles?

WSJ Personal Finance columnist Jason Zweig stops by Mean Street to point out that spotting stock market bubbles is harder than it looks.

This transcript has been automatically generated and may not be 100% accurate.

I ... the intelligent investor sold Jason Zweig is here ... to explain ... just how often ... history does repeat itself ... especially when it comes to speculative bubbles ... in case and ... thank you for sharing your intelligence with his band wound was do or we can do OK we have a big piece coming out from you tomorrow ... the keeper I get all my later today barely a minute ... and you raise the figure of Charles Mackey ... the main Charles ESK Charles MacKay yet with that have a photo with the ... winning ... try as much as February ... they ... need ... he was Lilit a hundred sixty years and so in the euro fade as Bach watch and tell ... tell our viewers little with how well the Nikkei was a contemporary Charles Dickens and and Charles Darwin for that matter ... a bunch of other great people in the British Empire ... he was a journalist in Scotland who wrote ... what this day is probably the most famous book on speculation ... and ... market madness never written called extraordinary popular delusions and the madness of right and there are two examples in the book in particular that are very famous one is the South Sea bubble yet any other was the great tulip bubble hem of my kids sixteen hundred sixteen thirty sixteen thirty Xinyu in ... Enchova Netherlands Act and ... create cities are great reads I advise all of you were interested in history or get sick ... yet ... McCain ... found himself in the middle of his own speculative bubble just a few years after that that was what was really astounding is that the book came out in eighteen forty one ... and became ... one of the reasons the book has never been out of print and has sold more Tony knows how many copies ... is because it's so well written and it says Keating indictment ... of how intelligent people in isolation ... becomes stupid when reading the former heard right ... and he was in the just in in our wrote ... in our own investing lives in the last eleven WellCare is used in a bubble right now with the credit bubble which will help ... bubbles of monumental proportions ... and yet as clever as we are and is ... as much foresight is Charles MacKay and the book we think the US to return to cap and what's really fascinating and I think ... humbling for people to be aware of ... is the rehab Nikkei ... two years after he wrote a book ... scrupulously documenting the way people go crazy ... in herds over ... investments that are worth what you're paying for them ... he fell hook line and sinker ... for one of the biggest stock market bubbles in the history the world wish lists British Railways operating railway mania ... he ... took off in eighteen forty three in eighteen forty four ... the peak in eighteen forty five and by the time was over in eighteen fifty ... people had lost two-thirds of their money in today's dollars ... a trillion dollars destroy it not been became self lose money unless he doesn't seem to live with much it is on the capital ... cricket ... bodies then there were a lot of other runner he was even in a paper diary SDY any room for some Scottish the irony was that he was one of the editors of the Glasgow Argus ... the people that that is not EDD when he was very high-profile ... he was regarded as one of the leading financial analysts and great Britain at the time ... and his his projections ... for how the railways would grow ... where ... five times more aggressive ... than ... the most bullish ... of their forecasts that were available so here with the guy who just written about a terrible manias where ... and then when one was steering am I missing the into it All said don't worry about it all but I figured this thing out ... he reminds me of ... the poll sidelined for this on the boxer and you know it ... and here's what he wants to hear and disregards the rest and Saturday it's a classic ... of your child and even just ... the man had written all about bubbles in the polls for ... what the big Charles MacKay would say ... today on the day when the Groupon's IPO was at a valuation of twenty billion dollars ... break up the that makes no money whatsoever ... and is an electronic coupon company like they would depend on whether you ask him while he was writing it but ... she ... was ... great ... the British railway stocks ... we would like to hope he we counsel caution I mean ... certainly ... the only thing investors can know for sure is that when ... the mood turns more enthusiastic ... in general ... it's a good time for you and of the aisle that the ... more Scotland cap caviar and tore it all in a Jason Zweig ... don't forget to read his piece on this very question in the Wall Street Journal tomorrow ... thank you Jason ... come on board